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Exhibit
10.01
L EAP F
ROG E NTERPRISES , I
NC .
S TOCK O
PTION A GREEMENT
Pursuant to your Stock Option
Grant Notice ( “Grant Notice” ) and this
Stock Option Agreement, LeapFrog Enterprises, Inc. (the
“Company” ) has granted you a
nonstatutory stock option to purchase the number of shares of the
Company’s Class A Common Stock ( “Class A
Common Stock” ) indicated in your Grant Notice at the
exercise price indicated in your Grant Notice.
This option (i) is not
intended to qualify as an “incentive stock option”
within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the “Code” );
(ii) is not subject to, and is granted outside of, the
Company’s 2002 Equity Incentive Plan; and (iii) is
granted pursuant to the June 5, 2008 approval by the
Company’s stockholders of the Company’s option exchange
program.
The details of your option
are as follows:
1. V
ESTING . Subject to the limitations contained
herein, your option will vest as provided in your Grant Notice,
provided that vesting will cease upon the termination of your
Continuous Service (as defined in Section 10) as an Employee
of the Company.
2. N
UMBER OF S HARES
AND E XERCISE P RICE
. The number of shares of Class A Common Stock subject to
your option and your exercise price per share referenced in your
Grant Notice may be adjusted from time to time for certain
capitalization adjustments, as provided in
Section 9.
3. M
ETHOD OF P AYMENT
. Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of
the exercise price in cash or by check, bank draft or money order
payable to the Company or in any other manner permitted by
your Grant Notice, which may include one or more of the
following:
(a) In the
Company’s sole discretion at the time your option is
exercised and provided that at the time of exercise the
Class A Common Stock is publicly traded and quoted regularly
in The Wall Street Journal , pursuant to a program developed
under Regulation T as promulgated by the Federal Reserve Board
that, prior to the issuance of Class A Common Stock, results
in either the receipt of cash (or check) by the Company or the
receipt of irrevocable instructions to pay the aggregate exercise
price to the Company from the sales proceeds.
(b) In the
Company’s sole discretion at the time your option is
exercised and provided that at the time of exercise the
Class A Common Stock is publicly traded and quoted regularly
in The Wall Street Journal , by delivery of already-owned
shares of Class A Common Stock (either by actual delivery or
attestation) either that you have held for the period required to
avoid a charge to the Company’s reported earnings (generally
six (6) months) or that you did not acquire, directly or
indirectly from the Company, that are owned free and clear of any
liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value (as defined in Section 10) on the
date of exercise. “Delivery” for these purposes, in the
sole discretion of the Company at the time you exercise your
option, shall include delivery to the Company of your attestation
of ownership of such shares of Class A Common Stock in a form
approved by the Company. Notwithstanding the foregoing, you may not
exercise your option by tender to the Company of Class A
Common Stock to the extent such tender would violate the provisions
of any law, regulation or agreement restricting the redemption of
the Company’s stock.
1.
4. W
HOLE S HARES . You may exercise
your option only for whole shares of Class A Common
Stock.
5. S
ECURITIES L AW C
OMPLIANCE . Notwithstanding anything to the
contrary contained herein, you may not exercise your option unless
the shares of Class A Common Stock issuable upon such exercise
are then registered under the Securities Act of 1933, as amended
(the “Securities Act” ) or, if such
shares of Class A Common Stock are not then so registered, the
Company has determined that such exercise and issuance would be
exempt from the registration requirements of the Securities Act.
The exercise of your option also must comply with other applicable
laws and regulations governing your option, and you may not
exercise your option if the Company determines that such exercise
would not be in material compliance with such laws and
regulations.
6. T
ERM . You may not exercise your option before
the commencement or after the expiration of its term. The term of
your option commences on the Date of Grant (as set forth in the
Grant Notice) and expires on July 5, 2016; provided,
however , that in accordance with the provisions of the
Employment Agreement (as defined in your Grant Notice), the term of
your option shall expire prior to the foregoing expiration date if
your employment with the Company terminates prior to such date, as
set forth in the Employment Agreement.
7. E
XERCISE .
(a) You may exercise
the vested portion of your option during its term by delivering a
notice of exercise (in a form designated by the Company) together
with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business
hours, together with such additional documents as the Company may
then require, all in a manner consistent with the procedures
approved by the Board for exercise of stock options by other senior
executives of the Company.
(b) By exercising your
option you agree that, as a condition to any exercise of your
option, the Company may require you to enter into an arrangement
providing for the payment by you to the Company of any tax
withholding obligation of the Company arising by reason of
(1) the exercise of your option, (2) the lapse of any
substantial risk of forfeiture to which the shares of Class A
Common Stock are subject at the time of exercise, or (3) the
disposition of shares of Class A Common Stock acquired upon
such exercise.
8. T
RANSFERABILITY . Your option is not
transferable, except by will or by the laws of descent and
distribution, and is exercisable during your life only by you.
Notwithstanding the foregoing, by delivering written notice to the
Company, in a form satisfactory to the Company, you may designate a
third party who, in the event of your death, shall thereafter be
entitled to exercise your option.
9. A
DJUSTMENTS UPON C
HANGES IN S TOCK
.
(a) Capitalization
Adjustments . If any change is made in, or other event occurs
with respect to, the Class A Common Stock subject to your
option without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than
cash, stock split, liquidating dividend, combination of shares,
exchange of shares, change in corporate structure or other
transaction not involving the receipt of consideration by the
Company (each a “Capitalization
Adjustment” ), your option will be appropriately
adjusted in the class(es) and number of shares and price per share
of securities subject to the option. The Board of Directors of the
Company (the “Board” ) shall make such
adjustments, and its determination shall be final, binding and
conclusive. The conversion of any convertible securities of the
Company shall not be treated as a transaction “without
receipt of consideration” by the Company.
2.
(b) Dissolution or
Liquidation . In the event of a dissolution or liquidation of
the Company, your option shall terminate immediately prior to the
completion of such event.
(c) Corporate
Transaction. In the event of a Corporate Transaction (as
defined in Section 10), any surviving corporation or acquiring
corporation may assume your outstanding option or may substitute a
similar stock award for your outstanding option (it being
understood that similar stock awards include, but are not limited
to, awards to acquire the same consideration paid to the
stockholders or the Company, as the case may be, pursuant to the
Corporate Transaction). A surviving corporation or acquiring
corporation (or its parent) may choose to assume or continue only a
portion of your option or substitute a similar stock award for only
a portion of your option. In the event that any surviving
corporation or acquiring corporation does not assume your
outstanding option or substitute a similar stock award for your
outstanding option, then unless otherwise provided by the Board,
you may exercise your option (to the extent vested) prior to the
effective time of the Corporate Transaction, and your option shall
terminate if not exercised prior to the effective time of the
Corporate Transaction.
(d) Change in
Control. Upon the occurrence of a Change in Control (as defined
in Section 10), the shares subject to your option shall
beco
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